ASSTT CIT Vs. GURU HARKISHAN PUBLIC SCHOOL
INCOME TAX APPELLATE TRIBUNAL
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Deepak R. Shah, A.M. -
(1.) THIS appeal by revenue is directed against the orders of learned Commissioner (Appeals), Karnal dated 15-5-2006. The revenue raised following grounds before us:
1. On the facts and in the circumstances of the case, the learned Commissioner (Appeals) has erred in law in allowing exemption under Section 10(23c)(iiiad) to the assessee which was denied by the assessing officer in the assessment order.
(2.) On the facts and in the circumstances of the case, the learned Commissioner (Appeals) has erred in law in deleting the addition of Rs. 9,08,720 made by the assessing officer on account of unsecured loans not proved to be genuine.
2. The assessee filed return of income declaring nil income. The assessee primarily claimed exemption under Section 10(23C)(iiiad) of the Income Tax Act. The assessing officer denied the claim of exemption under Section 10(23C)(iiiad) by observing as under:
This is a case of Society registered under the Society Act, 1860. The assessee has filed a copy of certificate dated 18-6-1987. The Memorandum of Association and aims and objects of the society have been filed by the assessee who is on a plain paper and a photocopy of the same has been filed. There is no date of incorporation of memorandum of association and aims and objects. No dale has been put anywhere to establish the society has been registered on 18-6-1987 and there is also no date on the certified copies which could establish as this is photocopy or original documents. From the above, it is clear that the society is neither registered with any authority nor under any Section of the Act which qualify for exemption under Sections 10, 11 and 12 of the Income Tax Act, 1961. The aims and objects which were registered earlier with the Registrar of the society on 18-6-1987 might have been changed afterwards and it cannot be said that these are same aims and objects of the society which were registered on 18-6-1987. Therefore, this is a case of a private school which is not entitled to any exemption under Sections 10, 11 and 12 of the Income Tax Act. The assessee has claimed the income as exempt under Section 10(23c) in the computation of income attached with the return of income. Section 10(23c)(iiiab) or (iiiad) is not applicable in this case as the institution is purely a private institution which is being run not solely for providing education but for the purpose of earning profit.
The assessing officer also held that there is increase in total fees received in the last five years. There is also increase in the assets side every year as per two previous years. He, therefore, concluded that the assessee is running school not for the purpose of providing education for the poor and needy children but with the object of earning profit. Therefore, the school cannot be said to be for charitable purpose under definition of Section 2(15) of the Act.
During the appellate proceedings, certified copies of the registration certificate and memorandum of aims and objects were filed. It was also certified that there is no change in the aims and objects of memorandum of association of the society from the day of its inception. Copy of these submissions was forwarded to the assessing officer for his comments. The assessing officer in the remand report reiterated the finding given in assessment order. Learned Commissioner (Appeals), after considering arguments of the assessee and the remand report submitted by assessing officer, held as under:
The matter has been considered. The relevant assessment record has also been looked into. It is seen that a photocopy of Certificate of Registration of Societies issued by the Registrar of Firms and Societies, Haryana on 18-6-1987 is available on the assessment file of the assessing officer. A photocopy of the Memorandum of Association is also available on the file of the assessing officer. The appellant has however filed certified copies of these documents before me. The copies have been certified by Notary Public. The memorandum of association has also been certified to be true copy by the Distt. Registrar of Firms and Societies, Karnal on 28-12-2005. A fresh certification of the documents already available on the file of the assessing officer cannot be said to be additional evidence. Copies of various approvals granted by the Central Board of Secondary Education have also been filed. A perusal of all these documents clearly shows that the institution run by the appellant society exists solely for education. It cannot be said to be existing for the purposes of profit only because it had earned some profit. Since the appellant had claimed exemption under Section 10(23c)(iiiad), provisions of Sections 11 and 12 are not relevant in the case of the appellant. Keeping in view the above discussion.
it is held that the assessing officer was not justified in denying exemption under Section 10(23c)(iiiad) to the appellant.
(3.) WHEREAS learned Departmental Representative relied upon finding of assessing officer in denying exemption under Section 10(23c)(iiiad), learned compel for assessee relied upon appellate order.;
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